Lee Constable

Servos warn of petrol price hike under ethanol mandate

DRIVERS have been warned they could face an 8c a litre hike in fuel prices if the NSW Government pushes ahead with a plan to boost ethanol sales.

The government is considering a mandate to increase sales of blended E10 petrol so ethanol makes up 6% of service stations' entire output.

Greens MP John Kaye said the move had few environmental or employment benefits, suggesting it had more to do with boosting sales of the state's only ethanol producer.

Queensland, the home of Australia's only two other major ethanol manufacturers, introduced a 3% ethanol mandate with bipartisan support on Tuesday.

But Dr Kaye said scrapping retailers' exemption would force them to pass on costs to consumers unless $326 million in compensation was paid to cover upgrades.

The upper house MP issued a statement saying the Manildra Group had donated more than $4.3 million to the Liberals, Nationals and Labor since 1998.

He said the company met with nine ministers at 20 separate events between September 1, 2014 and September 31 this year.

"Motorists and small businesses are being shackled to the profits of a major donor in the name of claimed environmental and employment benefits that don't exist," Dr Kaye said.

"Whatever slight environmental benefits might be achieved are dwarfed by the economic costs to motorists, the transport industry and in the long run the entire economy."

Sellers with fewer than 20 service stations will be exempt from the mandate.

A 2013 Independent Pricing and Regulatory Tribunal review into biofuel found it was more expensive to supply in regional areas of NSW.

- APN NEWSDESK


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